Baby boomers–those born between the years 1946 and 1964–are retiring at a record pace. About 52% have fully retired from the workforce, up from 45% in 2011. However, some are deciding to remain in the workforce a little longer, whether out of passion or financial necessity. About 9 million Americans are currently in a second-act career.
Working during retirement has become the new normal. Close to half of retirees (about 47%), say they have worked or plan to work during their retirement. What’s even more surprising is that about 72% of pre-retirees age 50 and over say they want to keep working after they retire, according to a Merrill Lynch retirement study entitled Work in Retirement: Myths and Motivations. The report found that in the future, it will be unusual for retirees not to work. This is due in large part to increased life expectancy, the recent economic instability, and the fact that many companies are doing away with pensions. Those who pursue second acts stay in their next career for about nine years.
One pre-retiree on his way toward a satisfying retirement is 67-year-old Joseph J. James. He recently started a Columbia, South Carolina energy products business named ATP-SC, which is set to go operational at the end of the first quarter of 2015. Right now, James has just one employee. For 33 years, James worked for several municipal and state economic development corporations or departments. He attained top leadership positions in economic development units in Philadelphia, Austin, and Prince Georges County, Maryland. Upon leaving his senior post at the South Carolina Department of Commerce in 2004, James exited the 9-to-5 world to enter entrepreneurial life.
By the time he retired, James had accumulated savings of $750,000 to $1 million. “I’ve always tried to maximize my retirement [contributions] from the very beginning of my career,â€ says James, who invested the maximum allowable contributions and estimates that he sets aside roughly 10% of his income for retirement savings. In addition, James has enough emergency savings to cover several months’ worth of personal expenses.
While at the South Carolina Department of Commerce, James received firsthand knowledge of chronic rural poverty in the South, particularly along the “Corridor of Shameâ€ near Interstate 95. “One of the ways to create jobs and economic activity in poor communities is to try to add value to the assets that are already in those communities,â€ James says. “Poor, rural communities have plant material, wood material from agriculture and forestry, and if you can add value to that biomass material, you can create jobs that are tied to those communities.â€ In 2008 James founded Agri-Tech Producers L.L.C., of which he is the sole employee.
That same year, because of his efforts to promote the green economy in these communities, James won the $100,000 Purpose Prize from Encore.org, which rewards people over age 50 for their works for the greater good. James added $300,000 of his own savings to that amount. “I took the funds they gave me and put it toward my business.â€ James, who is not taking a salary from his business, lives off of income from real estate investments, Social Security, and other investments.
Through Agri-Tech, James has licensed North Carolina State University’s patented torrefaction process, which transforms raw biomass into a relatively clean-burning bio-coal. His $3.65 million Allendale, South Carolina pilot plant is in the process of lining up financing. The plant will purchase biomass at between $35 and $50 per ton, add value to it through the torrefaction process, and sell the resulting treated material for $300 to $600 per ton. James expects the pilot plant to be profitable starting in year one.
For more tips on planning for your retirement, see The New Playbook for Retirement in the October 2014 issue of Black Enterprise.